Foreign funds return to Bursa Malaysia, but marginal

Good impact: Gains made on Bursa Malaysia yesterday were due to the positive sentiment in Asian markets and the rise in US stock futures after the US and China agreed not to impose more tariffs on each other

KUALA LUMPUR: Foreign funds bought RM28.3mil net of local equities last week, the second lowest weekly foreign net inflow recorded so far this year, according to MIDF Research. 

The research house said Bursa started the week on a rough note as foreign investors disposed RM115.0mil net on Monday, as investors anticipated a slew of interest rate decisions, especially from the Federal Reserve after stronger-than-expected U.S. data fuelled bets that the central bank may have less cause to ease monetary policy.

Nevertheless, the level of foreign net selling tapered significantly to RM14.6mil net on Tuesday. This was partly attributable to the slight gains on Wall Street on Monday despite choppy trading amidst the ongoing trade dispute and the possible effect on economic growth.

“International funds made a decent comeback on Wednesday, acquiring RM125.2mil worth of local equities on Bursa. Much of the risk-on mood was spurred by the prospect of an extended meeting between President Trump and President Xi Jinping meeting in Japan this week at the G-20 Summit to relaunch trade talks after a month long impasse,” MIDF said, adding that offshore investors were back in selling mode albeit at a measurable pace of RM20.9mil net on Thursday. 

“Friday was the highlight of the week as a moderate foreign net inflow of RM28.3mil partially contributed to the 0.4% gain in the FBM KLCI to reach the highest close since March 20, 2019, following the Federal Reserve’s signal that it was ready to lower interest rates for the first time since 2008,” it said. 

With one more week of trading left in June 2019, MIDF said foreign investors have so far disposed RM37.1mil net. On a year-to-date basis, the foreign net outflow from Malaysia stands at RM4.84bil. 

Foreign investors emerged as the investor group with the largest increase in terms of average daily traded value (ADTV) of 25.7% to RM1.45bil. This is the strongest level of participation in three weeks.